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EP4: How to find daily bias using DRT — Transcript

by Ali Khan · 6,429 words · 947 segments · language en · Watch on YouTube

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0:04All right, guys. Welcome back. I hope
0:06you're all well. My voice is a little
0:08better this week. Thank you guys for
0:10reaching out to me and wishing me well.
0:12Now, I've had a lot of questions again
0:15come over this week, and I want to take
0:17a few minutes to answer some of those. A
0:20lot of them regarding the direction of
0:22the mentorship, and I want to clear up
0:24some things regarding the partnership
0:27with Funded Peaks. So, I guess I'll
0:29start with that. Now, a lot of people
0:31have asked why, and some people have
0:34panicked, and so I just wanted to clear
0:36a few things up. It's more of a mutual
0:38decision. Having an education platform
0:40associated with a prop firm seemed like
0:42a good idea, right? And the issues from
0:45my part started to arise when, which is
0:48probably funny to my audience because
0:50they wanted me on as an educator,
0:53but
0:54was very reluctant for me to teach any
0:56ICT.
0:58Now, my audience know that I'm This is
1:00the highest level of ICT outside of ICT.
1:03We ended up clearing it up, and in the
1:06end, we agreed to do the mentorship on
1:09this YouTube channel.
1:11From Funded Peaks' perspective, they
1:13wanted to use this content to clip it
1:17and make content for their own channel.
1:19The problem that they have is is because
1:21they have absolutely no clue about ICT.
1:24They don't know what they're clipping,
1:26right? They have no clue. So, in that
1:28sense, it made no sense. So, from my
1:30perspective, it was like, well, you may
1:33as well just go any educator out there
1:36and find somebody that you guys are
1:39happy with and that works for you. Find
1:41an influencer. I'm not an influencer.
1:43We mutually ended the partnership. I
1:46wish Funded Peaks the the best of luck,
1:49but it just didn't really make sense for
1:51myself. Now, a lot of people have asked
1:53me, does that mean I'm going going the
1:55mentorship? No, I'm going to continue
1:57the mentorship. I'm going to do it for
1:58free. This is the highest form of ICT
2:01outside of ICT's work. And dealing range
2:04theory, just the small parts that I've
2:06introduced already, are really helping a
2:09lot of people out there. Now, again,
2:11I've said this is not for beginners.
2:13It's not beginner-friendly. There are
2:14students who have been with ICT for 2-3
2:17years plus who have contacted me and
2:20said how this was the missing piece for
2:22them. I went through that journey myself
2:24of piecing the ICT puzzle together. And
2:27essentially, this is what I'm giving you
2:28guys here. A lot of people are asking
2:31for a more simplified version. And that
2:33is what I intend to do
2:36in August. So, the beginning of August,
2:39I'm going to run an 8-week boot camp.
2:41And that will give you a solid
2:44foundation to number one ICT concepts
2:47and dealing range theory. There's going
2:49to be a private group, and there's going
2:50to be coaches in there answering
2:51questions as well as myself. There's
2:54going to be weekly live Q&A sessions.
2:56There's going to be three, maybe four
2:59lectures a week that are going to drop
3:01on different topics. It's going to be
3:03quite an intense. It's my biggest
3:04project that I'm going to do so far. And
3:07there's a whole lot of other things.
3:08There's going to be a psychologist
3:09working with us.
3:11There's a whole lot of other things that
3:12I'm throwing in there. Enrollment for
3:15the boot camp is going to start
3:16hopefully in July. And once enrollment
3:19is done, then I'm going to start the
3:22boot camp, and I'm going to come off
3:23social media for duration of that 8
3:25weeks so I can focus on really helping
3:29the new students and building them up to
3:31a very good intermediate level. Now,
3:34that will bring you to the advanced
3:36market maker course, where that really
3:38goes much, much deeper into dealing
3:40range theory. Again, that's placed as an
3:43intermediate in step two of the learning
3:46curriculum because, again, it's more
3:48advanced stuff. That course is not
3:50complete. If you have purchased that
3:52course and you have access to that
3:54course on the website, there are updates
3:57coming. The purpose of that course was
3:58to give you the language, right? So that
4:00I can teach this mentorship. I'm going
4:02to add more refined market maker models
4:05and trade plans and all sorts of stuff
4:07inside of that course. And anybody who
4:09has that course, those updates you will
4:11get for free. Anybody who purchases that
4:14course after the updates have been
4:15released,
4:16the price is going to go up. So if you
4:18haven't got that course yet, I'd
4:20recommend that you get it at the price
4:21it's up because there's a whole lot of
4:23stuff I'm going to add to it yet. It's
4:25taken me almost 3 years to build this
4:28curriculum. And this free mentorship
4:30here is a small part of that overall
4:33larger curriculum. The last part is this
4:36boot camp, which is going to be the
4:38foundation to dealing range theory and
4:41ICT concepts. So that will be step one
4:44once it's all been complete. Step two is
4:46going to be the market maker model, and
4:48then step three is my private mentorship
4:51archive. That was 18 months of you
4:54seeing what I'm doing here, just much
4:56deeper, as well as showing my real
4:59executions. There's dozens and dozens of
5:02examples and showing you the logic and
5:04calling price beforehand and then
5:06breaking each trade down. And again,
5:09that's exclusive for my private
5:11community. The only way to join my
5:14private community is if you have
5:16purchased the mentorship archive. And
5:18I've explained this before because I get
5:21swamped too many questions for me to go
5:23through and a lot of the new students,
5:25as you can imagine, you have dozens and
5:27dozens and dozens of questions and a lot
5:29of them just become repetitive. So this
5:31is the purpose of the boot camp because
5:32I'm going to have coaches. I've got four
5:33coaches working with me, as well as a
5:36psychologist. So a lot of these
5:37questions that you have, we're going to
5:39be able to answer them. And obviously,
5:41I'll be doing the live Q&A every week as
5:44well. So you can and a response from me
5:46and my coaches that I personally trained
5:48over the last two or three years. Who,
5:50if I'm being honest, they're as good as
5:51I am now. So, this free mentorship is
5:54going to run until August, right? The
5:58beginning of August is when I'm going to
6:00come away from social media. And that
6:03brings me on to my next topic that why
6:05am I trading Forex and why am I doing
6:08this Forex mentorship? Because it's a
6:10question that I'm getting asked a lot.
6:11Why is price action so difficult right
6:14now? Why is trading so difficult right
6:16now? And essentially that comes down to
6:18what you can see here. And this ties in
6:20nicely with another question that I got
6:22asked is what is dealing range theory or
6:25DRT? What's it supposed to be used for
6:28and how can it help? When you look at
6:31this price chart in front of you,
6:32especially for somebody who is fairly
6:35new, it doesn't make a whole lot of
6:37sense. And one of my purposes for this
6:40mentorship is to help you identify times
6:43where you're going to have easy price
6:45action in the form of low resistance
6:48liquidity runs and you're going to have
6:49time where price action is more
6:51difficult to read. Dealing range theory
6:54is like the canvas for the markets. The
6:57buy and sell programs are going to run
7:00inside of dealing ranges and the whole
7:02market moves from dealing range to
7:04dealing range to dealing range. And just
7:07like price, the dealing range structure
7:09is also fractal. Essentially, the
7:12dealing range is the structure of the
7:14markets and it is the canvas for PD
7:16arrays and candlesticks to print. DRT
7:20levels are true structural support and
7:23resistance in the market. It allows us
7:25to categorize the markets into premium
7:29and discount ranges and it also allows
7:31us to mathematically calculate how high
7:34or low a buy or sell program will be
7:37permitted to move. Dealing range theory
7:40or DRT is the glue that holds all of ICT
7:43concepts together. When you get to a
7:45good enough level with ICT, you will
7:47understand that it's the final piece to
7:49the jigsaw. Again, this isn't renaming,
7:52rebranding anything. This is pure ICT
7:55and it's meant to help remove that fog
7:59where you're questioning
8:01what order block do I pick? What fair
8:03value gap do I pick? And I absolutely
8:06understand that. I was at that stage for
8:09many years. When I really understood
8:12dealing range theory, that's what
8:13unlocked everything. And you're not
8:15going to be able to get it in just one
8:17video of me speaking about it. It's
8:19going to require you to go into your own
8:21charts, backtest and forward test and
8:24see how price is reacting at these
8:26levels and look for algorithmic
8:28signatures in price that are revolving
8:30around the DRT levels. There's going to
8:33be this blend of confluence of key
8:35levels where time and price aligns and
8:38how the DRT gives the structure of the
8:41market. Anyway, let's get into today's
8:43teaching. I hope you can hear the audio
8:47correctly. I'm currently not in my
8:48office at the minute and I'm away on
8:50business. So, I've got a new microphone
8:52and
8:53been playing around with the settings
8:55and I just hope it's clear enough for
8:57you to hear me.
8:59When you look at this chart in front of
9:00you, the two reference points that we
9:03want to focus on
9:05is this high which run the buy side
9:08liquidity above this swing high and this
9:11low which run the equal lows or the sell
9:15side liquidity below these relatively
9:17equal lows down here. Now, if you
9:20notice, this high has a lower high to
9:23the left, a swing high
9:25and it has a lower swing high to the
9:28right making this a long-term high.
9:31Again, this has already been explained
9:32in the advanced market maker model
9:34course, but
9:36when we're looking at institutional
9:38swing points, we can categorize from
9:41short-term highs, intermediate-term
9:44highs, and long-term highs. The longer
9:46the term, the more liquidity is going to
9:49be resting at those levels because this
9:50is where institutions are looking at,
9:53right?
9:54Once we have identified the highest high
9:57in our dealing range and the lowest low
9:59in our dealing range,
10:01we can then grade the entire range into
10:04our DRT levels. Again, if you want to
10:07look back at episode 1 for reference
10:09since I already explained it all in
10:10there, but
10:12there's going to be obviously an element
10:13of repetition because this is how we
10:16learn and this is how we train our eyes,
10:18right? So, I did this study on the
10:212-monthly time frame if you recall back
10:23in episode 1.
10:25The same logic and the same principles
10:27I'm going to apply on this daily time
10:29frame. So, already you can see that
10:33we have been consolidating
10:35inside of the lower half of the dealing
10:39range, right?
10:41So, we've been consolidating inside of a
10:43discount relative to the dealing range
10:46high and the dealing range low. That's
10:48the first observation point we can see
10:51and I've got a lot of data on this
10:54chart, right? This is going back to
10:56September 2023.
10:59One thing I notice with a lot of my
11:01students is they're too zoomed in,
11:03right? You want to zoom out. Get as much
11:06detail as you can so that you can see
11:08the bigger picture, right? You can see
11:09the overall parent dealing range. This
11:12is how it will give you your reference
11:14points. We know that we're in a
11:16longer-term consolidation inside of a
11:19discount relative to the parent dealing
11:22range. You can see how we haven't closed
11:25here above the equilibrium price point.
11:28Note all the consolidation
11:31around the lower 25 DRT level. Note this
11:35fair value gap over here. It's going to
11:37play a pivotal role and price is going
11:39to be consolidating
11:41around this fair value gap. And it will
11:44have a role in the future. And this
11:47brings me on to a question. How do I
11:49know when a fair value gap is going to
11:52be used again? Well, it depends on
11:55number one, what type of fair value gap
11:56there are. There are different
11:57classifications of gaps. And again, this
11:59is all being explained in the advanced
12:01market maker model course. There are
12:03going to be certain key fair value gaps
12:05that are going to be utilized by the
12:08algorithm. In some case, many, many
12:10months later. Of course, it's relative
12:12to time frame. But where these gaps form
12:15inside of the dealing range is going to
12:17give you a clue. Now, some gaps can be
12:20used in the same way
12:22as we would use the opening price of a
12:25session or a candle, for example. I'll
12:28get into a little bit more detail at
12:30some point, but for now
12:32I'm going to dim these DRT levels. Just
12:35to keep them on the charts, but just to
12:36make things a little bit more tidy,
12:38right?
12:39What other observations can you see
12:41here?
12:42Well, we've already discussed one of
12:44these here is the equal lows.
12:46This is a major sell side liquidity
12:49pool. Number one, because of being on
12:50the daily time frame. Number two,
12:52because this is a double bottom. So,
12:54what are retail going to look at here?
12:57This is support, right? This is a trap
13:00for retail. They will create equal lows
13:04to build up sell side liquidity below
13:06those lows. And then they will go on to
13:08attack it. Smart money were selling up
13:11here. They were selling over here. They
13:14were selling here, and they were selling
13:16here. And to cover those shorts, they're
13:18going to be buying back the sell stops
13:21below these relatively equal lows, and
13:23accumulating long positions down here.
13:26Right?
13:27So, they've bought from the sellers and
13:30then they've sold back to the buyers
13:31above these highs, these highs,
13:34these highs.
13:36And if you recall in the first episode,
13:39one of the parameters that the algorithm
13:41looks to do is reprice back to where?
13:44Equilibrium.
13:46Right?
13:46In the lower quadrant, so from the 25%
13:50DRT down to the zero level,
13:53what can you see?
13:56We have these consecutive down close
13:58candles.
14:00Look how quickly it's running.
14:03It's all being jagged back and forth cuz
14:05this is accumulation of liquidity below
14:08the market and above the market. Retail
14:11will see this trend line forming.
14:13And then they quickly take the market
14:16lower. You can see how we've got all of
14:17these gaps here. What Why are they
14:20taking price down there in such a
14:22manner?
14:23Because they don't want anybody to get
14:25out, right? So, people who have their
14:27stops below these lows, they don't want
14:29to drift down there slowly and give them
14:32time to get out of their positions.
14:34They're going to really run and attack
14:36those positions. This run lower,
14:39sweeping all the sell side liquidity,
14:41all these down close candles are
14:44creating what?
14:46An order block, right? More
14:47specifically, this is a bullish order
14:49block. Now, we can grade an order block
14:53just as we can grade a fair value gap
14:55and just as how we can grade a dealing
14:57range. An order block will be made up of
15:00one big down close candle on a higher
15:02time frame and every candle is a range
15:05in itself. Now, every candle isn't a
15:07dealing range. There are specific things
15:11required for a dealing range, but every
15:14candle can have its own range with its
15:16own high, low, open and close. If we
15:19grade this whole candle into four equal
15:22quadrants, we can get the grades of the
15:24order block. Notice how in the lower
15:26quadrant, where we have this fair value
15:29gap, we touched it there
15:31and we touch it there. Also note with
15:34this candle that we didn't close back
15:37below the equal lows to the left.
15:41And then we displace higher back through
15:44the midpoint of this order block. Also
15:46note where we have this gap forming
15:49inside of that order block.
15:51And then price pushes higher. So this
15:53leaves us with these relative equal
15:56highs up here in the form of a major buy
15:58side liquidity pool. And we also have
16:01the sell side liquidity below this swing
16:03low as a major sell side liquidity pool.
16:06In between the major buy side and major
16:09sell side, we have shorter term highs
16:12and lows where we're going to have minor
16:14buy side and sell side liquidity, right?
16:17So above this high, we'd have minor buy
16:19side and below this low, we'd have minor
16:22sell side because the dealing range high
16:25to the dealing range low is where we are
16:27going to find our major buy side and our
16:30major sell side liquidity pools.
16:33That is also true for the parent dealing
16:35range here. The major buy side liquidity
16:38pool above this high is going to house
16:40more liquidity than this and the major
16:42sell side liquidity pool below this low
16:45is going to house more sell side
16:46liquidity than this. When we run the
16:50opposite ends of a dealing range, that
16:53is crucial as an algorithmic signature.
16:56When you're looking for your high
16:58probability turtle soups,
17:01you're waiting not to take a previous
17:04candle. You're waiting to take a
17:06previous dealing range and then the buy
17:09or sell programs kick in. I'm going to
17:11get into more detail about it all, but
17:13what you're going to find is there are
17:15many, many, many levels to this, right?
17:18I'm going to try my best to keep it as
17:19simple as I can and not go off on a
17:21tangent, but I do respect your time and
17:24I'm trying my best to pack in as much
17:26value as I can here. So,
17:28anyway, let's keep it moving. Now, what
17:31other point of interest would I be
17:32interested in inside of this dealing
17:34range? Now, if you followed me for a
17:36while, you know
17:37that there are only two things that the
17:39algorithm is going to reprice for. Is
17:41liquidity or inefficiencies, right?
17:44Since we are in a discount relative to
17:46the dealing range, I'm looking for the
17:48algorithm to reprice above equilibrium
17:53into a premium. And I'm looking to see
17:57if I can see any liquidity or
18:00inefficiencies inside of a premium
18:03relative to this dealing range. I can
18:05see this sell-side imbalance over here,
18:07where we've only had price offer
18:09one-sided delivery, right? Sell-side.
18:12So, this sell-side imbalance sits above
18:15these relative equal highs, which sits
18:19just below the 50% DRT level, our
18:22equilibrium price point. So, I know that
18:25this is a very logical area for the
18:28algorithm to reprice to. Now, does that
18:30mean that's going to happen straight
18:31away? As traders, we are speculators,
18:35right? In a way, we're playing a
18:37detective to
18:39understand the movement of price and
18:41forecast the movement of price.
18:43This theory of not being able to time
18:46the market, not being able to predict
18:49where the market is going to go,
18:51that is taught by people who have no
18:53idea what they're talking about, right?
18:55Our job as speculators is to predict
18:58market price. This is how we make money.
19:00If you can't predict where the market is
19:02going, you're gambling, right? The
19:04caveat is you're not going to know 100%
19:07for certain that the market is going to
19:09play out to your expectations. You have
19:12an expectation and you stick to that
19:15expectation. That's going to be your
19:16bias and you're going to form that bias
19:19by understanding what is the market
19:21reaching for. You keep that bias until
19:24you are proven otherwise and there there
19:26may be something in the market that
19:28comes up and trips you and says, well,
19:30this was a level that I was looking to
19:32hold as support or resistance and it
19:34didn't do it. And then you have to sit
19:37back and you have to reassess. If you
19:39see ICT do his live streams, there are
19:42many times where he's wanting the market
19:45to do something
19:47but it does something opposite and that
19:49gives him feedback and information and
19:51then he says, I am no longer interested
19:53now in buy side and my attention now
19:56goes down to sell side, right? It's if
19:58and then and there's certain things in
20:00price that is going to trigger you to
20:02form that bias and make that decision.
20:04So, from a longer term perspective here
20:07on the daily time frame of the dollar
20:09index, this area here looks appealing to
20:13me. We also have the minor buy side
20:15liquidity pool in the form of these
20:17relative equal highs that also sit below
20:20equilibrium.
20:21So, I see there's a a lot of liquidity
20:24above the market in the form of buy side
20:27liquidity and I can see a big
20:29inefficiency here,
20:31right? We're going to have a lot of up
20:33and down movement before we get to this
20:35level if we get to this level at all. If
20:37I have strong conviction that the daily
20:40and the weekly is moving higher, then
20:42I'm predominantly going to look for buys
20:45on the lower time frames if I'm intraday
20:47trading. Not every single day is
20:49obviously going to be a buy day. If I am
20:52counter trend trading to the higher time
20:54frame bias, which I often do, then I
20:57reduce my risk in half most of the time
21:00because it is going against the higher
21:02time frame direction. Anyway, let's
21:05let's zoom in here on this piece of
21:07price action and I can talk about this
21:08in a little bit more detail.
21:11So, here we are zoomed in. We have the
21:14major buy side liquidity pool in the
21:15form of these relative equal highs that
21:17just sit below the equilibrium price
21:20point of the parent dealing range. We
21:22have the major sell side liquidity pool
21:24below this low and we have that daily
21:26sell side imbalance above the market. I
21:28want to now dissect this range. Now, we
21:31can use the high to the low. We can also
21:35grade the swing from the highest
21:36rejection block. So, the highest up or
21:39down close to the lowest rejection
21:42block. So, the lowest up or down close.
21:45Now, I'll get into calibrating grades at
21:48some point as well. Now, there are
21:49different reasons for me grading or
21:52calibrating a swing is because I'm
21:54familiar with which signatures I'm
21:55looking for at what particular level,
21:58right? Because there's going to be a
22:00discrepancy between brokers, you're
22:02going to know that obviously there's
22:04going to be different highs and lows
22:05between brokers.
22:06So, sometimes if I can't get a clear
22:08read and levels aren't aligning, I'll
22:11opt to use the bodies because that's
22:13where the volume's going to be, right?
22:15Sometimes I'm going to use higher time
22:17frame levels that are overlapping in
22:19close proximity and I will tend to
22:22anchor my fibs from those higher time
22:25frame levels. There's no secret science
22:27to it. It's just using a bit of logic.
22:30In the beginning, it's better to just
22:32use the high and low and look for levels
22:34in close proximity to those DRT levels.
22:37As you get more experience, you can
22:39start calibration of these DRT levels
22:42and refine things. Now, I've calibrated
22:45this dealing range and we have the
22:48initial consolidation here inside of the
22:51calibrated dealing range from the body
22:54to the body. Now, this candle we
22:57displace lower closing back below this
23:00swing low after we had run by side above
23:04this high and this high, and also dipped
23:07above the rejection block here. We don't
23:09want to do anything until we see this
23:11happen. Because you're going to get
23:13chopped up and down inside of a
23:14consolidation, and this is something why
23:16ICT says, "Let time do the heavy
23:18lifting." Right?
23:20This is an algorithmic signature that
23:23gives us the green light that a sell
23:25program is about to commence. And
23:27leaving this fair value gap here is an
23:30important part of that signature. Again,
23:33all of this has been discussed in the
23:35advanced market maker model course. So,
23:37we've completely filled in this sell
23:39side imbalance over here, making this a
23:42key high. And then we have our expansion
23:45lower from this high all the way down to
23:47this low down here. If I take this high
23:50down to this low, and I project
23:51deviations lower, three standard
23:54deviations over here,
23:56gives us a level of 100.617.
24:02We get 100.588
24:04over here.
24:05We would round this level up to 600, and
24:07we'd obviously round this level down to
24:09600. And this is how you do
24:10calibrations. This level also overlaps
24:13with the order block level. It also
24:15overlaps with the old equal lows,
24:17and a fair value gap to the left, which
24:19is why it's a logical level. But again,
24:21that's just going to come by way of
24:22experience. Note how one standard
24:24deviation here overlaps really, really
24:27nicely with the equilibrium price point.
24:30Note what we see in the lower quadrant
24:32of the dealing range. We have these
24:34consecutive down close candles. What
24:36does this form? This forms an order
24:38block. Note the opening price of the
24:39order block. It sits dead on that 25 DRT
24:43level. When price runs through the
24:46opening price of this order block,
24:49this is a change in state of delivery.
24:52This means that we have shifted from a
24:54sell program
24:56into a buy program. And now the
24:58algorithm is only interested in offering
25:00buy-side delivery. Note how we come into
25:03it here. Retail ICT, because there's
25:06such a thing as retail ICT nowadays with
25:08everybody trying to teach what they
25:10don't know, they're going to look at
25:11these down close candles and they're
25:12going to say, "Well, this is the order
25:14block." No, it's not. The order block
25:16starts there. This is where we had the
25:18sell program that run the lows forming
25:21the order block. We have these relative
25:24equal lows where there's a lot of
25:25sell-side engineered above the order
25:28block. And then we tap into that order
25:30block here.
25:31Notice how we accumulate around the 25%
25:34DRT level and go into this
25:35consolidation. Note that we had this
25:38buy-side imbalance inside of the order
25:40block and we had institutional order
25:42flow entry drill over here at the 50%
25:45DRT level or equilibrium. We have the
25:48same thing. We have these consecutive
25:49down close candles that run into the old
25:52order block that run the sell-side
25:54liquidity. We take the opening price and
25:56we extend it across. You can see how we
25:59find support here at the opening price.
26:01It's really nice price action there.
26:04More specifically, price is reacting to
26:07the high to the open. What is this
26:10structure? What is this PD array?
26:13It's an order block, but more
26:14specifically,
26:16this is an order block that has tapped
26:17into our parent order block and moved
26:20away from it. This becomes a propulsion
26:24block. The high to the opening price of
26:26the propulsion block and look at the
26:28bodies over here. We wick into where?
26:31The equilibrium price point. And then
26:32what happens? Price really explodes
26:35higher. We come and touch it again one
26:37more time over here. That's a signature
26:40in itself because I don't want price to
26:42come back into an order block once it's
26:44left like this. And if we do, I want to
26:47see an explosive move away from that
26:49area. And we haven't, we've been quite
26:51lethargic. So, I'm going to get into
26:53this piece of price action over here,
26:54but this is already indicating some
26:56element of weakness to me. After we came
26:59into the propulsion block, we moved
27:00higher. Where did we go to?
27:03We came into this liquidity void. This
27:06is an actual gap, right? It's the
27:08absence of any bodies or wicks. What
27:11else does this price point overlap with?
27:14The midpoint of the initial range that
27:16gave us our projections.
27:18We can calibrate that to 106.5. You can
27:21see how we're failing to leave a body in
27:24that gap. We're failing to get above it
27:26or close above it. This straight away
27:27indicates that there's weakness here and
27:29the market might want to roll over. We
27:31then see price run lower, close below
27:35the 75 DRT level, leave a small fair
27:38value gap. Look at the bodies respecting
27:41that DRT level. What is this indicating?
27:43That price wants to move lower. What are
27:46we seeing occur at the same time as all
27:49of this is happening? Well, if we look
27:51at intermarket analysis between a
27:53correlated pair like the British pound,
27:56when we was making this high on Tuesday,
27:5916th of April,
28:01we were making this low on the pound. On
28:05Monday, the 22nd of April, we had posted
28:08a lower low with pound,
28:10but we failed to post a higher high. So,
28:12this is an indication that there's
28:14something going on, right? On the 1st of
28:16May, we post a higher high with the
28:18dollar index, but on the British pound,
28:21we failed to post that lower low since
28:24they're inversely correlated. On the 9th
28:26of May, the dollar index fails to post
28:29the higher high, and we see the bodies
28:32rejecting to close above the 75 DRT
28:34level. On the British pound, we see it
28:38post a lower low. And then what happens?
28:40And then we see the dollar index
28:42displace lower, and we see the the pound
28:45displace higher. It's also worth noting
28:48that we've completely rebalanced
28:50the sell-side imbalance created on the
28:53dollar index on the 15th of May, and we
28:56haven't even dipped into the buy-side
28:58imbalance posted on the 15th of May.
29:00Now, notice what I'm saying, right? I'm
29:02talking about the dates. Smart money
29:05tool, smart money technique. It's not
29:08It's smart money time, right? And in my
29:11opinion, I think when ICT talked about
29:13SMT and he was very vague about it being
29:15called smart money tool or smart money
29:17technique.
29:18It's actually smart money time because
29:20that's just going to give it away,
29:21right?
29:22It's time. Time is the most important
29:25factor.
29:26When are the highs and lows forming?
29:29It's not just any high and low. What I
29:31just said there is a huge gem. And I'm
29:34I'm going to coin that term, smart money
29:36time. That's what SMT stands for. Go
29:38back through your charts and backtest
29:40and pay attention to the time, the
29:42session, the day of week, the month. And
29:45this is going to give you so many
29:47lightbulb moments going forward. Anyway,
29:50uh let's get back to the dollar index
29:51here. So, you can see how we run above
29:54this high here. This high became an
29:56intermediate term high because we
29:58rebalanced this sell-side imbalance over
30:00here. We run above that level here
30:04and into the equilibrium price point of
30:06a consolidation. After we seen the SMT
30:09divergence between the British pound and
30:13price failed to get back above the 75
30:15DRT, and we've seen this breakdown with
30:18displacement below this swing low over
30:20here, leaving this sell-side imbalance.
30:24Now, what am I looking at here? I'm
30:26looking at what retail are thinking.
30:29Retail are looking at this trend line
30:31here. I'm looking at this as a whole lot
30:33of sell-side liquidity that also sits
30:36inside of a discount relative to our
30:39dealing range. I still anticipate that
30:42we could likely run higher to sweep the
30:45buy side above here, here, and dip into
30:48that sell side imbalance. But, I'm
30:50anticipating that before they do that,
30:53they're going to upset the retail
30:55sentiment. Now, there's a few reasons
30:56why I'm anticipating higher prices is
30:59because we do have election year, right?
31:02I don't think the dollar should be where
31:03the dollar should be. In my opinion, I
31:05think the dollar's going to drop longer
31:07term. Looking at the way the economy is,
31:09it doesn't make sense for the dollar to
31:11be propped up and Of course, everything
31:12is manipulated, and they're going to
31:15most likely manipulate a higher dollar
31:17going into the general election.
31:19Seasonally, we should be running higher
31:22on the dollar at the minute, and we're
31:24not. We we've we run lower.
31:27But, I'll get into that in a second.
31:29Let's zoom into this piece of price
31:31action, and I can then get into a little
31:34bit more detail.
31:35So, here we are zoomed in.
31:38Now, last week I said that we have this
31:41sell side imbalance, and we were being
31:44held below the consequent encroachment
31:47of this sell side imbalance. On Monday,
31:49we failed to close above the discount
31:52low of that sell side imbalance. On
31:54Tuesday, we failed to close above it,
31:56but we created this down close candle.
31:58On Wednesday, we dropped into that down
32:00close candle, and then we really run and
32:03fully closed this sell side imbalance.
32:06Thursday, I was looking to see do we
32:09want to close and have any legs to run
32:11higher. We dropped all the way down into
32:14the discount low of that sell side
32:16imbalance. We found support there, but
32:19what is this here?
32:22This is an immediate rebalance, right?
32:25So, the next candle I'm anticipating for
32:28this to run higher.
32:30If it does not do that, and it breaks
32:32down, and I have still an underlyingly
32:35bearish bias to run the lows down here.
32:38This is going to give me a clue and an
32:40indication of what price is likely to
32:42do. On Friday, instead of finding
32:44support on the premium end of the
32:46sell-side imbalance, we break down and
32:49close below the consequent encroachment.
32:51Now, we can mohawk outside of a fair
32:53value gap, obviously, which is why we
32:55place our stop the candle that created
32:59the fair value gap low in this case. So,
33:01this candle here we'll be placing our
33:04stop above over this high. There are a
33:06lot of people who place the stop above
33:09the premium high of the fair value gap.
33:12But, because we can mohawk outside of a
33:14fair value gap, you should never place
33:16it above the fair value gap.
33:18Some people place it above the candle
33:20that created the fair value gap, and in
33:23my experience, you can still get tripped
33:25out like as you can see over here as
33:26well. So, a safe stop would be above the
33:29high of the candle that created the high
33:32of that sell-side imbalance, right? And
33:33vice versa if we're on a buy-side
33:35imbalance. What else am I noticing? I'm
33:38looking at this inverse fair value gap
33:39here. So, we have this buy-side
33:40imbalance. We came down, we fully
33:43rebalanced here. Look at the bodies.
33:46And then we ran higher, very sluggishly,
33:49back up into the premium high of this
33:51inverse fair value gap. In order for me
33:54to be convinced that we've turned a
33:56corner, we'd have to find support at the
33:59consequent encroachment of this inverse
34:01fair value gap, and then really displace
34:03higher. However, above price, we have
34:06these consecutive up close candles
34:08making a bearish order block. Inside of
34:11that bearish order block, we have this
34:12volume imbalance. And you can see how
34:15we're touching the consequent
34:16encroachment.
34:18Bodies not getting back above that
34:20volume imbalance.
34:21And we also have these consecutive down
34:24close candles. So, we have an area of
34:27mitigation to the left. Unless the
34:29market tips its hand and really shows me
34:31that it's going to displace away from
34:33this area, but since we came back into
34:35the order block and since we filled in
34:38this sell-side imbalance, price has been
34:40very lethargic, right? This is giving me
34:42an indication of weakness, right? And
34:45again, dipping into the order block one
34:47more time was another reason why I'm
34:49thinking that price is running lower.
34:51There are a whole lot of other reasons
34:52and this is within to market analysis as
34:54well and
34:56understanding how dealing ranges work
34:58with
34:59measuring strength and that's another
35:01topic of study that I'll get into at
35:03some point. Between May, April, and
35:06June, we anticipate seasonally for the
35:09dollar index to be bullish, right? May
35:12is generally a very, very easy seasonal
35:15tendency to see the dollar go higher and
35:19to see a decline on pound and euro.
35:22However, we aren't seeing the decline
35:25here seasonally as we should be doing.
35:28So,
35:29this is again giving me a reason to
35:31think that price may want to drop lower
35:33and upset the retail sentiment with the
35:36retail trend line. There are three key
35:39levels in particular that I'm looking
35:40at. The premium high of this sell-side
35:42imbalance, the premium high of this
35:45inverse fair value gap,
35:47and the actual high of our breaker /
35:50distribution block. Until I see any
35:53convincing movement with displacement
35:56above those levels, I'm only interested
35:59in shorts.
36:00I like how we've also had this small
36:02intraday retail trend line being created
36:05here on the lower time frames. So,
36:06again,
36:07this fits the narrative that we want to
36:09see price move lower. Now, we do have a
36:12bank holiday on Monday
36:14and we have some high-impact news
36:16towards the end of the week. And you
36:17want to look at that economic calendar
36:19as a road map and filter out the times
36:22that you want to be in front of the
36:23markets. And again, that is an absolute
36:26great study for you to go and back test
36:28and see how the market responds during
36:32high impact news events.
36:34Again, that's something that I'm
36:35planning on getting into during this
36:37mentorship. When we get more into the
36:39intraday price action, that's something
36:40that I'm going to really bring heavily
36:42in. So, with that, I hope you guys have
36:45found this one insightful.
36:47Uh there's again a lot of information
36:48that I've thrown at you today. You may
36:50have to go through it a few times, but
36:53if you have found any value out of this,
36:55please leave me a comment below and
36:58subscribe and like this video. It'll
36:59help the channel. Again, thank you guys
37:01for watching and I will catch you again
37:03in next week's lecture. Take care, guys.

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